He is currently being sued over his workplace retirement savings account by a bankrupt Kerrville consulting firm that has accused its previous president of embezzlement.
US Tax Recovery Partners filed a lawsuit against ex-president Stephen A. Canty on Tuesday in U.S. Bankruptcy Court to stop him from obtaining the roughly $200,000 in his 401(k).
In its lawsuit, the business claims that the funds “were the proceeds of criminality.”
Canty’s attorney, Raymond Battaglia, declined to comment on the complaint. US Tax Recovery Partners’ bankruptcy counsel, James Wilkins, did not instantly respond to a request for comment.
US Tax Recovery Partners Wants Corporation To Have All This Money
US Tax Recovery Partners is requesting that the court rule that the corporation is the rightful owner of the entire sum of money. It further requests that the funds be placed in a “constructive trust” for its advantage.
The corporation accused Canty of fraud and violation of fiduciary duty by manipulating the company’s finances, and the case appears to be the first legal action the company has filed against him.
According to Canty’s bankruptcy attorney, the company inflated the amount of money consumers owed it by $25 million, enabling it to access a $27 million line of credit.
According to the lawsuit, Canty “admitted to wrongdoing and illegal activities.” Three persons with knowledge of the investigation informed the San Antonio Express-News in April that FBI agents were looking into the matter. When contacted on Tuesday, FBI spokesperson Michelle Lee had no immediate response.
US Tax Recovery Partners and connected businesses B2B Prospecting and HJH Consulting Group, operating as The Salt Group, filed for bankruptcy protection on April 2. The filings for bankruptcy were justified by the manipulation of accounting records.
For 30 years, HJH has advised clients on how to save costs and expenses. US Tax Recovery Partners, a company that is no longer in operation, offered to assist clients in reducing their tax obligations. B2B prospecting assists HJH in generating business.
Canty, 57, lost his job on March 26 after working for HJH for 19 years. He was identified as the president of HJH in state corporation filings, but he also held the same position at US Tax Recovery Partners.
All of Canty’s 401(k) contributions, according to the lawsuit filed by US Tax Recovery Partners, were made through payroll deductions from his wages.
Canty requests receiving $55,000 from the account and having an Individual Retirement Account get the balance of $145,000.
Staff writer Patrick Danner, based in San Antonio, writes on banks and civil courts.